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10 Must Reads for the CRE Industry Today (August 28, 2018)

A study by San Francisco Federal Reserve Bank warns of a heightened risk of recession, reports Reuters. CBRE Global Investors has purchased stakes in three GGP malls, according to the Wall Street Journal. These are among today’s must reads from around the commercial real estate industry.

  1. Markets May Be Signaling Rising Recession Risk: Fed Study “A narrowing gap between short-term and long-term borrowing costs could be signaling heightened risk of a U.S. recession, researchers at the San Francisco Federal Reserve Bank said in a study published on Monday. The research relies on an in-depth analysis of the gap between the yield on three-month and 10-year U.S. Treasury securities, a gap that like other measures of short-to-long-term rates has narrowed in recent months.” (Reuters)
  2. Cushman & Wakefield’s Stock Boosted as At Least Three Analysts Rate It as a Buy “Shares of real estate services firm Cushman & Wakefield jumped Monday as analysts started coverage of the stock in a series of bullish notes. The stock CWK rose 1.5% to $17.92, putting it about 5% above its initial public offering issue price of $17. The firm went public on Aug. 1, raising $765 million that it’s using to pay down debt and for the catchall ‘general corporate purposes.’ At least six houses initiated coverage with a rating that was the equivalent of buy, focusing on the company’s strong position as one of three of the bigger global players in the space, along with CBRE Group Inc.” (MarketWatch)
  3. CBRE Global Investors Buys Stake in Three GGP Malls “One of the world’s largest real-estate asset managers has purchased a 49% stake in three malls in a deal that values them at more than $1 billion and shows that investors still have an appetite for top-tier retail property. CBRE Global Investors said it is buying stakes in malls in northwest Atlanta, Greater Minneapolis and Arlington, Texas, from Brookfield Property Partners, which will retain an interest. The malls, previously owned by GGP Inc., have a total of 3.7 million square feet of space and high sales of about $600 a square foot.” (Wall Street Journal, subscription required)
  4. Which States Have the Best and Worst Economies? “In most states, unemployment has improved in recent years as well, but that is not to say every state economy is equally healthy. Some states are experiencing an economic boom, while others continue to struggle with job losses, poor GDP growth, and poverty. Economic vitality is as much about growth as it is about a state's ability to support its population -- with jobs, education, and economic opportunities. In turn, employed, better-paid, and better-educated residents contribute to economic growth.” (USA Today)
  5. Hotel Security in Vegas, Elsewhere Hasn’t Earned U.S. Backing “Stadiums, corporate buildings and other facilities that draw crowds have strengthened their security since 9/11, and in return, they have earned U.S. protections in the event their efforts fail to prevent a terrorist attack and they are sued. But hotels have not received the same safeguards. Las Vegas’ world-famous casino-resorts have long been known to be of interest to terrorists, but the constant flow of people may pose a challenge to earning liability protections under a little-known federal law, an expert said.” (The Associated Press)
  6. Buying Rental Properties to Guard Against a Stock Market Crash “The stock market is doing well – too well. Most questions about investments come when the stock market is smoking hot or on life support. Should I own more stocks? Should I sell everything and go into cash? Thankfully, our firm provides deep education on sticking to an investment policy, so most of our clients tune out the noise. Even with that, we get a smattering of questions from left field. One that came up recently - should I buy rental property to guard against a stock market crash? I dissect that question here.” (Forbes)
  7. CMBS Loan Prices Down in July “The estimated price of whole loans securing the CMBS sector dropped from 96.5 percent in June to 96.2 percent in July. By the end of last month, DebtX priced $1.22 trillion in commercial real estate loans that collateralize CMBS trusts, adding that the median adjusted loan-to-value remained at 58 percent while the median debt service coverage ratio was unchanged at 1.52. The median estimated loan yields rose to 4.7 percent.” (National Mortgage Professional)
  8. Developers Hope to Revitalize Retail in Downtown Orlando “Growth is just about everywhere in the Orlando area — with the notable exception of downtown retail, which used to be thriving but now is at best ‘underserved.’ Local investor Rob Nunziata hopes to change that. He and his brother, Joe, co-ECOs of FBC Mortgage, this month bought downtown Orlando’s historic Church Street Train Depot property.  His goal is to bring in national tenants to gain momentum for the other type of retailers and restaurants that used to be found here such as Olive Garden.” (
  9. Death by Inertia? How Barnes & Noble Squandered its Opportunities “In 2013, e-book sales soared 43%, and industry pundits predicted the imminent demise of bookstores. But something happened on the way to that so-called demise: a cultural craving that could not have been anticipated. Consumers’ love affair with e-books cooled, or perhaps it had never really deepened. Turns out they loved real books more. It was a shift that handed Barnes & Noble a rare gift, giving it some much needed breathing room to rediscover its sweet spot in a book-selling marketplace radically changed by Amazon.” (Forbes)
  10. Office Absorption Continues on Upward Trajectory “Demand for office space remains strong. However, inventory continues to rise significantly this year with more than 550,000 square feet of construction delivered in the second quarter alone, to be followed by another half a million square feet for the balance of 2018, according to a recent report by Cushman & Wakefield. As this new product comes on line, competition for major tenants will heat up, swinging the pendulum back to the lessees’ favor.” (
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